Please read the 2 short articles below. In a nutshell; Brokers who work for Broker Dealers may soon face the same fiduciary responsibility as Registered Investment Advisors. This action, when it becomes law, will likely increase the already growing migration from the Broker Dealer world to the Registered Investment Advisory world, which is already held to the higher fiduciary standard. If you are offering advice about IRAs, 401k, and other retirement plans; get ready for a major shift in the landscape.
Currently Broker Dealers are responsible to ensure that their Brokers make suitable recommendations. This does NOT mean that their recommendations are always in their client’s best interest and often what is the best for the client takes a back seat to what is best for the Broker or Broker Dealer. This is where the abuses can be found and this is what the new rules promise to correct. We shall see.
On the flip side Registered Investment Advisors are obligated, by oath, to always act in their client’s best interest – now and in the future. This greater level of Fiduciary Responsibility translates to clients receiving superior advice.
I believe a similar level of responsibility may be mandated for those who sell annuities and other retirement related insurance products. I also believe this change will arrive in the insurance industry sooner than most will be prepared for.
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